KUALA LUMPUR (Jan 12): TA Securities has downgraded Scientex Bhd to “sell” at RM3.92 with an unchanged target price of RM3.89, following the recent increase in share price.

In a note on Friday, the research house said Scientex has a target to build 50,000 affordable homes throughout the nation by 2028 and these acquisitions are aligned with the interest of the group.

It said as at December 2023, the group has completed 32,975 homes.

“These parcels of land are earmarked for a mixed-property development project.

“No estimated GDV (gross development value) guidance was provided by the management,” it said.

TA Securities said in its forecast, the potential GDV of the land to be circa RM1 billion, based on Scientex’s past projects with a similar land size of 200 acres.

“We made no changes to our earnings forecast.

“The capex of RM207.6 million is within our projected capex for land purchase in FY2024 (circa 51% of FY2024’s forecast for capex of land).

“After this land purchase, Scientex’s FY2024 cash balance is expected to remain healthy at RM129.3 million with estimated net gearing of 0.2 times,” it said.